Dividing the Marital Home
When considering a
major life decision, at Meriwether & Tharp, we understand it is important
to weigh the different areas of your life which will be impacted by your decision.
When a married couple decides to divorce, resolving what to do with the marital
home is a big decision. Below, we will discuss two ways parties divide the
marital home.
Selling the Martial Home
The parties to a
divorce may decide to sell the home for many reasons but most common are
because neither party wants to remain in the home or because the parties cannot
afford the home individually. Although is most consistent for the child(ren) for
one party to retain the marital home, it may be emotionally difficult for the
parent retaining the marital home to stay in the home where they once lived as
a family with their ex-spouse.
In addition, if a
spouse would like to retain the marital home, they must earn enough income to qualify
for a refinance. Often, parties were able to afford the home with two incomes
but the party wishing to retain the home cannot afford the mortgage on a single income.
When the divorcing
parties sell the marital home, they usually use the money from the sale to pay
off what is remaining of the mortgage and divide the remaining equity.
Considering the state of the economy and rising mortgage rates, the parties may
find it challenging to sell their home in a declining housing market or may not
receive as much capital as they had hoped.
Would You Ever Take a Divorce Selfie?
One Party Purchases
the Marital Home
As mentioned above, one
party may choose to retain the marital home to provide consistency for the
child(ren) or simply because they are fond of the house and do not want the added
hassle of moving. If a party wishes to retain the marital home, he/she must be
able to buy out the other party's equity using separate funds and have the earning
capability to refinance the home in their individual name.
The party wishing to
refinance the marital home must consider any cost to refinance, as well as rising
mortgage rates, which will likely increase the monthly mortgage payment. If you
are considering divorce, it may be helpful to speak with a family law attorney to evaluate the unique circumstances surrounding the division
of assets and liabilities in your case.
Written by: Rebekah Ann James